B a second largest American automaker ford shows the austerity effect – the profit rose sharply at the beginning of the year. The group nevertheless announced further massive cost reductions. By 2022, $ 25.5 billion should be saved, as Ford announced Wednesday after the US market close. The effort is radically accelerated – in the fall, $ 14 billion had been spent as a target. In addition, the product range is to be cleared out.
Ford CEO Jim Hackett promised investors to take decisive action to increase profitability and maximize returns. Underperforming businesses that could not be “made fit” simply ran out of money. “We will redeploy capital,” said Hackett, who had taken over the wheel of the fallen because of lean profit margins of shareholders car dealers about a year ago.
Pick-up and SUV
In order to achieve the goals, the offer should be adapted more closely to the preferences of the customers. Specifically, this means that in North America, where especially pick-up trucks and SUVs are in demand, there will no longer be any funds invested in the development of traditional sedans. The only such models going into the next generation are the new Mustang and the Focus Active Crossover. Both cars are expected to be launched in 2019.
According to chief financial officer Bob Shanks, Ford wants to achieve a profit margin of eight percent by 2020 – two years earlier than previously planned. The last value was 5.2 percent. But Hackett’s austerity program was already noticeable in the first quarter. The surplus climbed nine percent to $ 1.74 billion (€ 1.43 billion) compared to the year before. Sales grew seven percent to just under $ 42 billion.
“The quarter was in line with our expectations and in line with our full-year goals, but we know what we can do – and we need to improve,” commented Chief Financial Officer Shanks on the results. Although higher material costs as a result of higher commodity prices weighed on business at the beginning of the year, the numbers clearly exceeded analysts’ expectations. For investors, the financial report and the announcement to push the austerity measures, because well. The stock gained by 2.7 percent after-hours.